MUMBAI SoftBank-backed Indian e-commerce firm Snapdeal has decided to pull the plug on its $152 million IPO, the company told Reuters, which is the latest casualty of a meltdown in tech stocks that has soured investor sentiment.
In December 2021, Snapdeal filed its initial public offering regulatory papers for approval, a year that saw many stock market debuts and record fund raising by Indian startups. Many are delaying IPOs due to a stock market rout that has raised concerns over frothy tech valuations.
Snapdeal, which competes with Amazon and Walmart's Flipkart in India's booming e-commerce space, filed a request this week with the country's market regulators SEBI to withdraw its IPO prospectus, said one source with direct knowledge of the matter.
There is no appetite for tech stocks right now, according to the source, who said that SEBI has been told about the prevailing market conditions and certain other strategic decisions that contributed to the change in IPO plans.
Snapdeal has decided to withdraw the IPO prospectus considering the market conditions, according to a statement to Reuters. It said that Snapdeal may reconsider its IPO in future depending on its need for capital and market conditions.
New Delhi-based Snapdeal was started in 2010 by Wharton alumnus Kunal Bahl and Indian Institute of Technology graduate Rohit Bansal. The company says it caters to the so-called value-for-money segment by selling value-for-money or more affordable products via its shopping website and app.
In 2016 Snapdeal, valued at $6.5 billion, has seen its popularity dwindle over the years as competition increases. It has had losses in the last three financial years between 2019 and 2021, and was hoping to raise new funds via the IPO at a valuation of $1 billion.
The change in Snapdeal's plans comes as tech stocks in India that have been listed in recent years are facing investors' wrath.
Shares in Indian digital payments firm Paytm, which raised $2.5 billion in one of the country's biggest IPOs in November 2021, have plunged 76 per cent since their debut.
After listing in July 2021, Zomato's shares have halved from their all-time highs.
In August, TPG and Prosus-funded Indian online pharmcy PharmEasy had to draw papers for its $760 million IPO, while Warburg Pincus-backed seller of wireless earphones, boAT Lifestyle, withdrew its papers in October.
The first source said Snapdeal hasn't decided on a new timeline for when it will be able to refile its IPO.
Snapdeal wanted to fund organic growth initiatives with the proceeds of its IPO, which was due to include a fresh issue of shares worth 12.5 billion rupees $152 million and an offer for the sale of 30.8 million shares.
The investors SoftBank, Sequoia Capital and Ontario Teachers' Pension Plan Board offered to sell part of their stakes in the IPO.